Regents Policy 4201: Policy on Defense and Indemnification of Regents and Officers of the Regents
Adopted January 1988
Amended May 2005, March 2008 and March 25, 2010
- Civil Action
A Civil Action is defined as any civil action or proceeding threatened, filed, maintained or pending in state or federal court, excluding Other Proceedings.
- Other Proceedings
Other proceedings include but are not limited to actions maintained or pending in state or federal court brought by or in the right of the Regents (“derivative actions”), administrative proceedings initiated by third parties and criminal proceedings threatened, filed, maintained or pending in any forum.
An Action is defined as a Civil Action or Other Proceeding, as the case may be.
Expenses includes without limitation attorneys' fees and any expenses of successfully establishing a right to indemnification hereunder.
Defense shall be limited to Expenses actually and reasonably incurred by the Indemnitee in connection with the defense of the Action.
Indemnification shall be limited to payment of any judgment (except for punitive damages, which are addressed in sections VI and VII below) fine, settlement, penalties or resolution of the Action.
Indemnitee is defined as each person described in section II below.
II. Persons Covered
The Regents of the University of California, a corporation, shall defend and indemnify as provided in this policy any present or former member of the Board of Regents or other present or former Officer of the Corporation who has been, is, or becomes a party to any Civil Action or Other Proceeding arising out of an act or omission occurring within the scope of his or her duties as a Regent or Officer of The Regents. This policy shall also apply to the Faculty Representatives, Student and Alumni Regents-designate and be applied to individuals who are appointed pursuant to Regents policies to positions as Advisors to the Board of Regents or to one of its committees.
III. Scope of Coverage
The defense and indemnification provided hereunder shall not be deemed exclusive of any other rights to which a party seeking indemnification may be entitled under any statute, bylaw, insurance, agreement, or otherwise, and shall inure to the benefit of the heirs, executors, and administrators of such party. Such defense and indemnification shall supplement indemnification and other legal protections provided by the federal Volunteer Protection Act, California Tort Claims Act and, other statutes, and other policies of the corporation and are provided for all covered actions or proceedings to the fullest extent permitted by law and public policy, regardless of any limitations of coverage contained in the indemnification provisions of relevant statutes or policies.
IV. General Conditions for Defense and Indemnification
As a condition of receiving defense and indemnification, the Indemnitee shall give prompt notice to the Board and the General Counsel to The Regents of the pendency of any Action for which he or she may appropriately seek defense and indemnification, shall keep the Board or its designee and the General Counsel apprised of significant developments in the Action, and shall cooperate in good faith in the defense of the Action.
V. When a Defense is Provided
- Civil Actions
Subject to the conditions of section IV above, an Indemnitee shall be entitled to a defense under this policy in a Civil Action if he or she was acting within the scope of his or her duties at the time of the act or omission, unless it is determined that the Indemnitee acted or failed to act because of actual fraud, corruption or actual malice. The extent of entitlement to a defense may be established by successful defense of the Civil Action or of claims, issues or matters therein, by the tribunal determining the matter, or in the event of an adverse determination, by an independent determination of the Board itself.
- Other Proceedings
Subject to the conditions of section IV above, an Indemnitee shall be entitled to a defense under this policy in Other Proceedings, including a derivative action, an administrative proceeding or criminal proceeding, if he or she was acting within the scope of his or her duties at the time of the act or omission and if it is determined that the Indemnitee’s act or omission was in good faith, without actual malice and in the apparent interests of the University. The extent of entitlement to a defense may be established by successful defense of the Other Proceeding or of claims, issues or matters therein, by the tribunal determining the matter, or in the event of an adverse determination, by an independent determination of the Board itself.
- Defense Prior to Final Disposition
Provided that the Indemnitee has delivered a written agreement in accordance with the requirements set forth below, the University shall begin providing the Indemnitee with a defense and/or advancing all defense costs on the Indemnitee’s behalf upon notice of an Action and prior to its final disposition. Any advancement of fees or costs shall be subject to a written agreement by the Indemnitee, substantially in the form attached to this Policy as Attachment A (pdf), to repay the University for such fees or costs if ultimately it is determined by the Board that the Indemnitee was not entitled to a defense. Any advancement of fees or costs to parties other than those retained by the University shall be subject further to the requirements set forth in paragraph V.D below. The University may decline or cease to provide a defense and/or advance fees or costs under this paragraph on a finding of good cause by the Board following an independent determination in accordance with section VII below. Such finding may be issued at any time before or during the defense of an Action.
- Counsel Retained by Indemnitee
Unless otherwise requested by the Indemnitee, the University shall provide a defense for the Indemnitee through the University’s Office of General Counsel and/or through other counsel retained by the University at its expense. In lieu of a defense by the University, the Indemnitee may retain separate counsel for his or her defense at University expense, subject to the following: the Indemnitee must provide advance written notice of the proposed retention to the General Counsel to The Regents; the proposed retention and its terms must be reasonable under the circumstances; all invoices or payment requests from separate counsel must be processed through the Office of General Counsel; all payment requests must be for fees and/or costs actually and reasonably incurred; and, to the extent that there is no conflict of interest, the Indemnitee and separate counsel must cooperate with the University in the defense of other parties and/or claims in the Action.
Unless and until the Committee on Governance decides otherwise, pursuant to this paragraph, the Indemnitee shall be permitted to proceed with the proposed retention of separate counsel, on the proposed terms, following delivery of notice pursuant to the preceding paragraph. The General Counsel, the President or the Chair, may, upon a showing of good cause, request that the Committee on Governance reject, modify, or take other action on any proposal by an Indemnitee to obtain separate counsel at University expense and/or on any invoice or payment request submitted by separate counsel following retention. The Committee on Governance may grant such request, or take other action, on finding good cause. Factors to be considered in determining good cause may include, but are not limited to, the following: the nature, scope and expected cost of the proposed retention, as compared to the types of claims and level of exposure presented in the Action; the nature, scope, expected costs, and other business terms of the proposed retention as compared to retentions typically entered into by the University for similar actions under similar circumstances; opportunities for joint representation with other defendants; and the reasonableness of any invoice or payment request in light of the services delivered, results achieved and/or amounts paid by the University for similar services in the Action or in like circumstances.
No request by an Indemnitee for separate counsel shall be denied on grounds that the Indemnitee fails to meet the requirements for a defense under this policy unless there has been an adverse determination in the Action or a finding of good cause by the Board following an independent determination, in accordance with section VII below.
VI. When Indemnification is Provided
- Civil Actions
Subject to the conditions set forth in section IV above, an Indemnitee shall be entitled to indemnification under this policy for a Civil Action if the acts or omissions of the Indemnitee satisfy the requirements for a defense under section V.A. above.
- Other Proceedings
Subject to the conditions set forth in section IV above, an Indemnitee shall be entitled to indemnification under this policy for Other Proceedings if the acts or omissions of the Indemnitee satisfy the requirements for a defense under section V.B above, and if further, in its sole discretion, the Board makes an independent determination that indemnification would be in the best interests of the University.
- Punitive Damages
Indemnification shall be made for punitive damages when it would otherwise be proper under this policy and under the following additional criterion: prior to such indemnification and in its sole discretion, the Board has made an independent determination that the Indemnitee’s acts or omissions were without actual malice and in the apparent best interests of the University and that payment of the award would be in the University’s best interests.
VII. Independent Determination
When any independent determination is required pursuant to this policy, it shall be made by the Board, by a majority vote of a quorum consisting of members not parties to such Action. If such quorum cannot be convened or, even if convened, if a majority of such quorum so directs, the determination shall be made by a disinterested third party appointed by such quorum or, by the Board itself. The independent determinations provided hereunder shall be made upon a consideration of all relevant facts and circumstances including without limitation the record of any Action giving rise to the request for indemnification.